More than 40,000 families living in Armed Forces accommodation will soon have private-equity millionaire Guy Hands for a landlord after his Terra Firma vehicle agreed a £3.2bn takeover yesterday.

Mr Hands is buying Annington Homes, the owner of the Ministry of Defence's Married Quarters Estate, from its owner, Japanese bank Nomura, in a deal due to complete by the end of the year.

The private-equity boss has a long-standing connection with Annington, having worked on Nomura's original acquisition of the homes in 1996, and then continuing to manage the portfolio after spinning Terra Firma out of the bank a decade ago.

The original deal saw Nomura become one of the largest owners of residential property in the UK through the acquisition of the Married Quarters Estate, then made up of over 57,000 properties, which was immediately leased back to the Ministry of Defence.

Some 17,000 properties surplus to requirements have since been sold off to first-time buyers, helping Nomura make a reported profit of some £2bn on the deal.

Mr Hands is pumping £1bn into the acquisition as well as refinancing £2.2bn in existing debt. He called Annington "an outstanding success story", adding: "It is a pure play UK residential property company with a blue-chip tenant on a lease of over 180 years and with the ability to benefit from the strength of the property market. We look forward to working with Annington's management as it moves on to the next stage in its development."

The swoop is by far the biggest of Mr Hands' three UK acquisitions this year after he bought care homes group Four Seasons for up to £825m in July and spent £276m on the Garden Centre Group, owner of chains such as Blooms and Wyevale, in April. The deals come after a difficult period for Terra Firma, which lost control of music giant EMI in February 2011 after a bitter court battle with US bank Citigroup. Terra Firma paid £4.2bn for EMI at the peak of the boom in 2007 but lost £1.7bn on the deal.

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